And all of this is happening just four months after launch. Even friends at Famitsu, the magazine that's closer to Nintendo than other, have told MCV of its surprise this morning

It’s not unprecedented, of course. The Xbox launched in March 2002 for £299.99. Just four weeks later Microsoft slashed the price to £199.99.And in that instance it worked, with Microsoft’s machine outselling the £130 GameCube over its lifetime.

But that was a different era. Microsoft was the new kid on the block. It had to be aggressive and is a company that has always been willing to fight retail battles through discounting. But this is Nintendo, the one platform holder that has always had profitable hardware and always doggedly stuck behind its RRP.

The Wii price cut earlier this year was the first time the machine had been discounted since launch. In fact, it even went UP in price in that time.

Plus the 3DS is the successor to the most successful gaming handheld ever produced. It’s the only device to offer affordable glasses-free 3D. We all thought it would be a success. And it still could be, of course.

But the one thing I love more than anything else about the games industry, it’s that it will always surprise you.

Most of my contemporaries believed the Wii would fail. It didn’t. Many doubted the DS could stand up to the PSP. It did. And we all thought the 3DS would be popular. Which as of yet, it hasn’t really achieved.

But despite the enthusiasm for the device, there were always questions hanging over Nintendo’s handheld strategy.

Most importantly, it’s certainly a credible question to ask if dedicated handheld games machines even have a place in the modern games market. With phones offering an increasingly rich gaming experience that’s always in your pocket, the incentive to carry a second, dedicated gaming device is certainly lessening.

And then there’s digital strategy which, let’s face it, has never been Nintendo’s strong point. The biggest question mark for me hovering over the 3DS launch was always the software pricing.

Is £39.99 even remotely viable for a portable game in the modern market? You can pump in all the ‘added value’ that you like, for it matters not when games like Flick Kick Football, Chinatown Wars, Game Dev Story, Drop7, Infinity Blade, Doodle Jump, Fruit Ninja and Espgaluda II can be had for pittance. And you don’t need to swap cartridges to play them either.

Here’s a bit of personal insight for you. Every day I get to the office and immediately crack on with the headline news of the day. After that I need coffee and a fag. After that I tend to browse sites like Touch Arcade and Slide to Play to check out the latest iPhone release. I’ll often drop 69p on one. Effortless. And so very, very cheap.

The 3DS launched without a digital store of any form.

But perhaps the biggest factor, and one even the most ardent critic couldn’t blame Nintendo for, is the Japanese earthquake. The biggest injustice being endured by Nintendo right now is the lack of recognition this terrible event deserves for the part it’s played in the early struggles of 3DS.

Solid, reliable Japanese success has been the backbone of Nintendo’s handheld strategy for years now. While certain international regions can be more varied in their enthusiasm for new hardware, and Nintendo handheld is always guaranteed to shift in Japan.

Then when sales dip, redesign the machine. It will sell even more. New colours? Sure, we’ll buy that. Non-advertised screen-tech upgrade? We know all about, guys. Give me one of those! You’ve changed the box it ships in? Best get me a new one then.

But when Japan was devastated by the earthquake and tsunami earlier this year that all changed. I guess frivolous things like gaming took an understandable back step. And without that to fall back, I’m wondering if Nintendo just doesn’t really know what to do.

None of this, of course, should mask that fact that today’s very significant price drop could be all that’s needed to completely reverse the machine’s fortunes. £130 is a great price for a great piece of kit. It’s ideal Christmas present price, one might argue.

The truth remains, however that £39.99 per game is NOT a great price. And ten free NES games and ten free Game Boy games for current owners? There aren’t even ten of each type available on the 3DS Eshop yet.

Oh, and Apple is expected to launch both a new iPhone and new iPod Touch in September. From my experience, that’s what all the kids want nowadays.

And what does all of this mean for the PlayStation Vita? Nothing, Sony would argue, as the two devices are targeting completely different markets blah blah blah consumers want premium features blah blah blah the most powerful handheld in the world blah blah blah.

But the truth is that this early move on the 3DS should send a worrying signal to PlayStation. The Vita could, in tech for cash terms, be the best value games machine ever made. But if you’ve already got a games machine in your pocket, as nearly every phone owner in the world does, then any outlay can suddenly feel a bit excessive.

2011 could very much be the year that the portable market changes forever.

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Interesting to hear that the Trade Price will be cut by a Third to retailers. At the moment Indie Retailers are charged between £205 - £207incl VAT whereas Amazon are selling them for £169 incl VAT. A cheaper console is always good for general business, but from a our point of view we can't sell these consoles now because of the price we are charged to get them - this fact will not change Our Trade price will change and Amazon will still be cheaper than Official Distribution. Nintendo have a line that states the Selling price is determined by the retailers - It is this that is putting retailers off selling their products - we all need to be selling at the same price.

MCV is the leading trade news and community site for all professionals working within the UK and international video games market. It reaches everyone from store manager to CEO, covering the entire industry. MCV is published by NewBay Media, which specialises in entertainment, leisure and technology markets.